How Greenwash commercials influence buying behaviour in luxury car market - Dissertation Example

?Marketing DissertationResearch Proposal Academic Year 11 …………………………………………………………………. Number: …………………… Supervisor:…………………………………………………………….. Working Title: A Study of how Greenwash commercials influence buying behaviour in luxury car market 1: Introduction/ Justification Green marketing is marketing of the presumed environmentally safe products. It includes modifications in products, changing production, processing and advertising processes (Zaman, n.d. 105). Many organizations are adopting the practise of Greenwash commercials to draw consumers’ attention towards their products, to derive maximum results. Most reputed organizations have started showing more concerns over the environment in recent times. Consumers also have their focus on using eco-friendly products. Much debate have been raised regarding the use of Green marketing as some organizations have adopted the use of the Green marketing without any real change in the product configuration or in their practise. The changing environmental and social aspects are creating challenges towards the product configurations, involving huge costs for the organizations. Hence, they are sometimes getting forced to make false claims that these products are completely environmentally adjusted. Such practices bring the ethics of the organization into question. This dissertation focuses on the clear understanding of the Green marketing and practices involving it and on the customer impact of the use of the Greenwash commercials. The dissertation also focuses on the false claim some organizations made through the Greenwash commercials discussing mainly the luxury car industry to study the impact of the Greenwash commercials on buying behaviours of the these consumers (Gillespie, 2008, p. 79). 2: Critical Literature Review/ Academic Foundation Green marketing and strategies: The impact of Greenwash commercials on buying behaviour seeks to understand the consumers’ psychological orientation towards purchase of products and how marketing strategies or advertisements can adapt to the same. Amongst the Response Hierarchy Models, Persuasive Hierarchy Model suggests that consumers are influenced by advertising and use the commercials to learn about different brands and reach their preferences based on the information they gain from these (Belch and Belch, 2003, p. 208). Here cognition is the precondition for making any buying decision. This model is applicable in high involvement purchase condition where the product or the purchase is crucial to the consumer. Such advertisement begins with awareness which leads to interest of the buyer and then results in action of purchase. These are highly true for consumers of cars. In Low involvement cases, the consumer prefer convenience goods, i.e.take the buying decisions based upon cost, etc. Here purchases are rapid and preferences towards brands are formed after trials. Integrated Models therefore suggest that buying decisions depend on situations and advertising works accordingly. The FCG grid (Appendix B: Integrated Model – FCG grid) formed by the advertising agency Foote, Cone and Belding can appropriately depict this with four different buying situations incorporating consumer motivation. For instance, in high involvement case, consumers’ motive will lead him to buy items like luxury watches when the idea is to transform their lifestyle or when the “feel good” factor is important to them. Again when product choice is based on information about the product, consumers will tend to choose automotives and appliances. In Low involvement case, they would go for package goods (cost effectiveness), while their choice is led by information. Under low involvement they would settle for variety goods in order to meet the “feel good” factor (Sorce&Dewitz, 2007, pp. 4-5). This dissertation focuses on a High Involvement case (a case of buying luxury brands of cars). For these goods there always lies a fear to consumers regarding the quality of the product and the brand. Green marketing and its components: Green marketing, originated at the time when the consumer awareness regarding the use of products for sustainable environmental protection reached a high. The practise of Green marketing has been more popular by firms who had their reputations hampered due to lesser responsible approach towards the environment (Zaman, n.d., p.105). The concept of Green marketing is also used in a large way by organizations in making a deliberate effort of improving their operations in a legitimate way to adhere to the guidelines of the corporate social responsibility policies. Generally there are two ways of marketing the concept of the Greenwash (Zaman, n.d., pp.105-106). It incorporates the introduction of products that focuses on energy efficiency and promoted the conservation of natural resources. Another way involves the promotion of products with an emphasis on adherence to the environmental guidelines. Customers were provided with a price through with the achievement of environment sustainability (Zaman, n.d., pp.106-109). Some of the positives which emerged from the practise include MacDonald’s who eliminated huge amount of weights from its dumping stream in the packaging of the products. Some of the leading hotels also educated its customers to conserve heating, water service, paper usage and using of lesser amount of toxic pollutants as measures to save and protect the natural resources. Green marketing was incorporated for the overall improvement of the marketing system and aimed at becoming the benchmark of larger quality marketing systems (Benn, &Bolton, 2011, p.112). Green marketing and its problems: Green marketing is a popular tool for convincing the customers that the organization is involved in activities towards the improvement of the environment (like reducing environmental hazards and degradation etc.) and it also acts as a way for hiding their practises which are causing environmental degradation. Corporate Watch, an organization claimed that the image based advertisement has a significant effect on the consumers. They claimed that initially the Greenwash commercials certainly have a positive effect on the consumers and they fall for it without knowing the truth behind the claim made by the organizations (Zaman, n.d., pp. 109-111). The tag line used in certain commercials which claims that their products are produced in the energy efficient laboratories also attracts the customers. Sometimes organizations claim that they support some environmental issues and environment-concerned customers buy their product with a view for contributing to their cause. Greenwash commercials often stress upon some issues concerning human rights and thus they continue with their activities. False practise of the Green marketing has spread throughout and seven sins of Greenwash have been identified. Certain organizations fail to establish their claim in the Greenwash commercials and falls under the sin of vagueness that occurs when the customers fail to interpret the claims of the commercials. (Paetzold, 2010, p.47). Examples of Greenwash commercials: A study by James (2011) highlighted the fact that the multinational organizations have incorporated the practise of the Greenwash commercials to win over the environment-concerned customers and it also claimed that there is a wide gap among the values or the perceptions created among the customers with that of the performance in reality. In his article he also highlighted the fact that the use of Greenwash commercials also involves building stronger connections and develops the brand value of the organization. The various factors highlighted by him regarding the difference between the perception and the performance include stronger brand value. Customers often assume that the claims of the brand leaders are true simply on the basis of the market position (James, 2011). Research conducted by Holcomb (2008) on three organizations which included Coca cola, Georgia Pacific and Shell reflects the results that the practise of the Greenwash helped them to promote the message which has variations from the reality. The Greenwash commercials also questioned on their real practise and their promotional campaigns. A research was conducted by Gillespie (2008) proclaimed that in the modern era the manufacturers are carrying out the wider campaigns of the Greenwash commercials. Such campaigns are misleading the consumers and it has had a significant impact on the buyer behaviour. The buying behaviour is guided by various factors which include the stages of post need recognition, information search, evaluation of alternatives, purchase decision (Gillespie, 2008). Research by Brake suggests that in spite of the discrepancy organizations have taken a considerable advantage of attracting the customers by the use of the Greenwash products through extensive marketing (Brake, 2009, pp.2-31). Green marketing and Consumers: The numbers of consumers with high levels of environmental awareness are rising steadily. Companies in a race to increase their reputation and credibility, trying to inform people in what way they are involved in preserving the environment. Out of all those, many are found to make false claims. Some make false claims about their packaging, while others promote activities that are irrelevant because they are bound by legally. This is bad for the companies that actually are deeply involved in preserving the natural resources. The problem occurs as to identify and draw a line between these two types of companies (Switzer and Vaughn, 1997; Paetzold, 2010). Green marketing and producers: Despite the problems of hampering the reputation, a company goes out of the way to inform the consumer of the environmental awareness persistent within the company. Companies such as Smith and Hawken promotes to its customers that it used shredded paper instead of plastic for its material used in shipping, and along with that they have a Rainforest Action Network in their mailings, that display petitions that show how the group had been active in its efforts to ban worldwide logging in old forests. Another company, Amway, run advertisements in national dailies showcasing environmental groups. These kinds of practices are worthwhile and hundreds of firms try to outdo each other in this endeavour (Switzer and Vaughn, 1997). Many corporations try to retool, repack or even rename a particular product. Companies like McDonalds have been known to take actions so as to reduce the amount of garbage produced in the US, by introducing a new kind of packing material. Sceptics have blamed the company for trying to build public relations. Proctor and Gamble was known to have followed suit with introduction of completely recycled packaging material for some products. These efforts, although criticized as marketing techniques, were actually helpful in contributing to the cleaning of the environment (Switzer and Vaughn, 1997, pp 137). Labelling and public relations have been unsuccessful many times. In the 1990’s, two firms, the Green Cross Certification Company and the Green Seal, started giving certificates on environmental compliances after evaluating companies on factors such as recyclable materials used and biodegradability of materials, but the process did not capture the imagination of the public, even though environmental groups hoped that the public would show significant response by switching to those products labelled environment-friendly (Switzer and Vaughn, 1997). Some cases of Greenwashing: A television ad by Toyota for their model Prius claimed that it was a hybrid emitted upto one ton less of carbon dioxide every year. They said, based on the average annual distance covered by cars, the Prius emitted 104g/km of carbon dioxide, while other cars registered 172gm/km of carbon dioxide. The Advertising Standards Authority examined the claim and found that the company had compared the car model to other petrol and diesel variants and also not to the UK average of 13,400 km per car. The reports generated were compared to their own cars only, and the advertisement was proved to be misleading and was prevented from being shown any further (ASA, 2007). In this case the companies overstated the properties of their products and hence misled the purchasing decisions of the consumers. In America, Kraft falsely promoted one of their cereals as made from natural ingredients, but the claim was found to be wrong, as the corn were found to be genetically engineered (Deen, 2002). Again The Council for Biotechnology Information endorsed books to children regarding genetically engineered food without mentioning the possible health hazards related to it. Clairol, a company that manufactured shampoos, used the phrase “truly organic experience”. However their products were found to contain chemicals which were not organic in any manner (Deen, 2002). In 2004, an advertisement in the National Geographic magazine, the motor company, Ford, tried to establish its commitment of saving the environment by launching one of its hybrid SUV’s and putting up a makeover at one of its factories. It was actually found that Ford was making only 20,000 of the hybrids per year, whereas it was manufacturing almost 80,000 trucks per month. It was also found by the Environmental Protection agency that the fuel economy of Ford’s cars were the worst among all car manufacturers. Thus Ford could not live up to its image and Ford got tagged as one of America’s worst Greenwashing companies (Whellams and MacDonald, n. d.). Since the average man now understands the need to protect the environment the companies have resorted to ill businesses practices to make up a false image (Deen, 2002). The term Greenwashing refer to a lot of things now, apart from the traditional definition of misleading advertisements, it refers to certain cases of environmental reporting, sponsorships of events and creation of ‘front groups’ (Whellams and MacDonald, n. d.). 3: Research Questions Research Questions: 1. To what level are customers aware of Green marketing? 2. Do commercials play a part in what type of cars customers end up buying? 3. Do Greenwash commercials mislead customers? The first question is related to the fact that whether the consumers under study know the concept called Green Marketing. The second question which has been highlighted in the dissertation is to find out the effectiveness of the commercial tools and techniques and whether commercials play a huge part in influencing the customers’ needs to be studied. The third question deals with the ethics level associated with the Green marketing. The concept of Green marketing has been in question because of the false practises incorporated by the organizations. The research aims to study whether the Green marketinghas a fair role to play. 4: Research Design Research Approach and Technique: The research has been based on both qualitative and quantitative research methods. Qualitative methods require the research study to describe the types and qualities of “people or events” without expressing them in the form of numerical figures (Thomas, 2003). Quantitative methods involve expressing the data collected in the form of numbers or amounts, having the focus on “measurements and amounts” of the attributes obtained from human factor or occurrences (Thomas, 2003). This approach makes use of case studies, individual experiences, interviews, and related processes that explain the problems and interpretations of naturally occurring activities (Thomas, 2003). For this dissertation however qualitative method has been applied. The research methodology for the particular paper will be based on the qualitative research method where the face to face interview of the people will be conducted. Sources and Collection of Data: A research method may be on the basis of either primary data or secondary data or a combination of both. Primary data are those that a researcher obtains himself after making a detailed research work. That is, the data collection happens “on hand”. And secondary data refer to those that are not new but have already been obtained by some other researchers at some point of time. These sources can in present be used to analyze a particular study. Secondary sources are easier and less time consuming to obtain and are less expensive compared to primary data (Malhotra, 2008, p.106). In the dissertation both the primary and the secondary data source will be involved. The primary data source will involve a sample of size of 50 car owners of luxury brands based in London. The method for the data collection will involve one to one interview method which may happen face to face, over the phone, or through emails. The sample size chosen for the interview is based on random sampling. The interview will include themes, such as the satisfaction of the consumer after purchasing the car and their intension towards the purchase, the attitude and image of the brand. The primary study will focus on the male car owners between 25 and 50 years of ageas secondary studies show that they are the largest group of consumers of the particular brand (Havlena and Holbrook, 1986).The secondary data involved in the research involves the use of various books and journal articles. Limitation of the Research: The dissertation conducted regarding the study of the impact of the Greenwash commercials on the buying behaviour has certain limitations. The data size chosen for the method is relatively small to understand the overall impact. The research carried out focussed only on one segment of the market as it involved the views of only the car owners. Green marketing is used by other segments of the industries and their views lie unidentified. The research methodology concentrated on a particular region and it may involve regional biasness in the views expressed. 5: Conclusion The research conducted studied the impact of the Green marketing on the buying pattern of the customers. It also focused on the aspect of whether the Green marketing has been ethically conducted by the organizations. The studies revealed the fact that the customers have been influenced by such commercials and a certain level of interest, created within them by viewing such commercials as they feel the use of such products, will serve their purpose and at the same time will do no harm to the environment.The research will study whether fair practise of Greenwash and the proper use of Greenwash commercials will indeed do much good for all. 6: References 1. 6.1: Academic 6.2: Supporting 1. Benn, S & Bolton, D, (2011), Key Concepts in Corporate Social Responsibility, London:SAGE Publications Ltd 2. Switzer, J.V. and Vaughn, J (1997), Green backlash: the history and politics of the environmental opposition in the U.S., Boulder: Lynne Rienner Publishers. 3. Paetzold, (2010) Corporate Social Responsibility (CSR): an International Marketing Approach, Hamburg: DiplomicaVerlag 4. James, T, (2011), Reaping the reward of green conviction, Engineering & technology, Vol. 6, No. 9, pp. 69-71 5. Gillespie, E, (2008),Stemming the tide of greenwash, Consumer Policy Review , vol.18, No,3,p.79, available at: http://www.greenwashreport.org/downloads/stemming_the_tide_08.pdf (accessed on November 19, 2011) 6. Havlena, W. & Holbrook, M. (1986), The Varieties of Consumption Experience: Comparing Two Typologies of Emotion and Consumer Behaviour, Journal of Consumer Research, Vol. 13, No. 3, pp.394-404. 7. Zaman, A.U, Green marketing or green wash , Journal of Ecology and the Natural Environment Vol. 2, No, 6, pp.104-111 8. Elen , S, (2004),Green washing, Communication arts, vol.46, No, 7,pp.198-205 9. Thomas, R.M. (2003), Blending qualitative & quantitative research methods in theses and dissertations, London: Corwin Press 10. Malhotra, N.K. (2008), Marketing Research: An Applied Orientation, 5/E, India: Pearson Education India 11. Whellams, Melissa and MacDonald, Chris,(n.d.), Greenwashing, Business Ethics, available at: http://www.businessethics.ca/greenwashing/ (accessed on November 19, 2011) 12. Kotler, P (2010), Principles Of Marketing: A South Asian Perspective, New Delhi:Pearson Education India, 13. Bowie, N, (2002), The Blackwell guide to business ethics,New Jersey: Wiley-Blackwell 14. Parguel, B. & Benoit-Moreau, F. (2011) How Sustainability Ratings Might Deter “Greenwashing”, Journal of business ethics, Vol, 102, no,1,pp.15-28 15. Theaker, A, (2008), The public relations handbook, London: Routledge 16. Belch, G. E. & Belch, M. A. (2003), Advertising and Promotion, India: Tata McGraw-Hill 1.ASA Adjudication on Toyota (GB) plc, (2006), Advertising Standards Authority, Available at: http://www.asa.org.uk/ASA-action/Adjudications/2007/6/Toyota-%28GB%29-plc/TF_ADJ_42615.aspx(accessed on November 19, 2011) 2.Deen, Shireen, (2002), Don't Be Fooled: America's Ten Worst Greenwashers, Greenwashing.net, available at: http://www.greenwashing.net/(accessed on November 19, 3. Whellams, Melissa and MacDonald, Chris,(n.d.), Greenwashing, Business Ethics, available at: http://www.businessethics.ca/greenwashing/ (accessed on November 19, 2011) 4.Brake, C, Recognizing and avoiding Greenwash, BSU, available at: http://cardinalscholar.bsu.edu/bitstream/handle/189614/1/B72_2010BrakeCatherine.pdf(accessed on November 19, 2011) 5.Whellams, Melissa and MacDonald, Chris,(n.d.), Greenwashing, Business Ethics, available at: http://www.businessethics.ca/greenwashing/ (accessed on November 19, 2011) 7: Appendix(excluded from word count) Appendix A: Persuasive Hierarchy Model: Advertising >> Cognition >> Preference/liking>> Behaviour Low Involvement Hierarchy Model Advertising>> Cognition>> Behaviour>> Preference Appendix B: Integrated Models – FCG Grid: Motivation Think/ Informational Feel/Transformational High Involvement Autos, Appliances Luxury Watches Low involvement Package goods Variety goods (Sorce&Dewitz, 2007, p. 5) Appendix C: GANTT Chart: Week 1 Week 2 Week 3 Week 7 Week 10 Week 13 Week 15 Week 20 Week 22 Literature Review ******* Research Question *************** Research Design ******* Primary Data Collection *************** Secondary Data Collection ******* Draft ******** Final Report ******* Read More